The Lily Barley Mills ( Private ) Limited ( Acquisition And Transfer Of Undertakings ) Act, 1996

GOVERNMENT OF WEST BENGAL 
LAW DEPARTMENT 
Legislative 
65 of 1951. 
West Bengal Act XIII of 1996 
THE LILY BARLEY MILLS (PRIVATE) LIMITED 
(ACQUISITION AND TRANSFER OF 
UNDERTAKINGS) ACT, 1996. 
[Passed by the West Bengal Legislature.] 
[Assent of the Governor was first published in the Calcutta 
Gazette, Extraordinary, of the 12th July, 1996.] 
[12th July, 1996.] 
An Act to provide for the acquisition and transfer; in the public interest, 
of the undertakings of the Lily Barley Mills (Private) Limited, and 
for matters connected therewith or incidental thereto. 
WHEREAS the Lily Barley Mills (Private) Limited had been engaged 
in the manufacture of flour; 
AND WHEREAS the management of the undertakings of the Lily Barley 
Mills (Private) Limited had been conducted in a manner highly 
detrimental to the public interest; 
AND WHEREAS the management of the undertakings of the Lily Barley 
Mills (Private) Limited was taken over by the Central Government under 
section 18A of the Industries (Development and Regulation) Act, 1951, 
on and from the 27th day of March, 1979; 
AND WHEREAS the period of the taking over of the management of the 
Company expired on the 26th day of March, 1996; 
AND WHEREAS for the purpose of reconstructing and rehabilitating 
the undertakings of the Lily Barley Mills (Private) Limited so as to 
subserve the interest of the general public by augmentation of production 
and distribution of the aforesaid articles which are essential to the needs 
of the general public, it is necessary to acquire the undertakings of the 
Company; 
It is hereby enacted in the Forty-seventh Year of the Republic of 
India, by the Legislature of West Bengal, as follows:- 
1. (1) This Act may be callec1the Lily Barley Mills (Private) Limited 
(Acquisition and Transfer of Undertakings) Act, 1996. 
(2) It shall be deemed to have come into force on the 27th day of 
March, 1996. 
Short title and cimmence-ment. 
145 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
[West Ben. Act 
(Sections 2-4.) 
Definitions. 	 2. In this Act, unless the context otherwise requires,— 
(a) "appointed day" means the date on which this Act comes 
into force; 
(b) "Commissioner" means the Commissioner of Payments 
appointed under section 9; 
(c) "Company" means the Lily Barley Mills (Private) Limited, 
being a company as defined in the Companies Act, 1956, 1 of 1956. 
and having its registered office at 19, Murari Pukur Lane, 
Calcutta-700 067; 
(d) "date of taking over of management of the undertakings of 
the Company" means the 27th day of March, 1979; 
(e) "existing Government company" means a Government 
company which is carrying on business on the appointed 
day; 
(f) "new Government company" means a Government company 
formed and registered on or after the appointed day; 
(g) "notification" means a notification published in the Official 
Gazette; 
(h) "prescribed" means prescribed by rules made under this Act; 
(i) words and expressions used herein and not defined, but 
defined in the Companies Act, 1956, have the meanings 
respectively assigned to them in that Act. 
Transfer to, 
and vesting 
in, State 
Government 
of the 
undertakings 
of the 
Company. 
General 
effect of 
vesting. 
3. On the appointed day, the undertakings of the Company, and the 
right, title and interest of the Company in relation to its undertakings, 
shall, by virtue of this Act, stand transferred to, and vest in, the State 
Government. 
4, (1) The undertakings of the Company shall be deemed to include 
all assets, rights, lease-holds, powers, authorities and privileges, and all 
property, movable and immovable, including lands, buildings, offices, 
factories, workshops, stores, instruments, plants, machinery and 
equipment, installations, laboratories, office furniture, stationery and 
equipment, vehicles, patents, trade marks, cash balances, cash in hand, 
reserve funds, investments, book debts and all other rights and interests 
in, or arising out of, such property as were immediately before the 
appointed day in the ownership, possession, power or control of the 
Company, whether within or outside India, and all books of accounts, 
registers and all other documents of whatever nature relating thereto. 
146 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
XIII of 1996.] 
(Section 4.) 
(2) All properties and assets as aforesaid which have vested in the 
State Government under section 3 shall, by force of such vesting, be 
freed and discharged from any trust, obligation, mortgage, charges, liens 
and all other encumbrances affecting them, and any attachment, 
injunction, decree or order of any court or other authority restricting the 
use of such properties or assets in any manner or appointing any receiver 
in respect of the whole or any part of such properties or assets shall be 
deemed to have been withdrawn. 
(3) Every mortgagee of any property which has vested under this 
Act in the State Government and every person holding any charge, lien 
or other interest in, or in relation to, any such property shall give, within 
such time and in such manner as may be prescribed, an intimation to the 
Commissioner of such mortgage, charge, lien or other interest. 
(4) For the removal of doubts, it is hereby declared that the mortgagee 
of any property referred to in sub-section (3) or any other person holding 
any charge, lien or other interest in, or in relation to, any such property 
shall be entitled to claim, in accordance with his rights and interests, 
payment of the mortgage money or other dues, in whole or in part, out of 
the amount of compensation determined under sub-section (1), and also 
out of the amount determined under sub-section (2), of section 7, but, no 
such mortgage, charge, lien or other interests shall be enforceable against 
any property which has vested in the State Government. 
(5) Any licence or other instrument granted to the Company in 
relation to any undertaking which has vested in the State Government 
under section 3 at any time before the appointed day and in force 
immediately before the appointed day shall continue to be in force on 
and after such day in accordance with its tenor in relation to and for the 
purpose of such undertaking, and, on and from the date of vesting of 
such undertaking, under section 6, in an existing Government company, 
or under section 7, in a new Government company, the existing or the 
new Government company, as the case may be, shall be deemed to be 
substituted in such licence or other instrument as if such licence or other 
instrument had been granted to such existing or new Government 
company and such existing or new Government company shall hold it 
for the remainder of the period for which the Company would have held 
it under the terms thereof. 
(6) If, on the appointed day, any suit, appeal or other proceeding 
of whatever nature, in relation to any property or asset which has vested 
in the State Government under section 3, instituted or preferred by or 
against the Company, is pending, the same shall not abate, be discontinued 
or be, in any way, prejudicially affected by reason of the transfer of the 
147 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
[West Ben. Act 
Central 
Government 
or State 
Government 
or existing 
or new 
Government 
company not 
to be liable 
for certain 
prior 
liabilities. 
(Section 5.) 
undertakings of the Company or of anything contained in this Act, but 
the suit, appeal or other proceeding may be continued, prosecuted or 
enforced by or against the State Government or, where the undertakings 
of the Company are directed to vest, under section 6, in an existing 
Government company, or under section 7, in a new Government company, 
by or against such Government company. 
5. (1) Every liability, other than the liability specified in sub-section 
(2), of the Company in respect of any period prior to the appointed day 
shall be the liability of the Company and shall be enforceable against it .  
and not against the Central Government or the State Government or, -
where the undertakings of the Company are directed to vest, under section 
6, in an existing Government company, or under section 7, in a new 
Government company, against such Government company. 
(2) Any liability arising in respect of— 
(a) loans advanced by the Central Government or the State 
Government, or both, to the Company (together with interest 
due thereon), on or after the date of taking over of 
management of the undertakings of the Company, 
(b) loans advanced by a bank to the Company (together with 
interest due thereon) on or after the date of taking over of 
management of the undertakings of the Company, 
(c) loans advanced by the Industrial Reconstruction Bank of India 
Limited to the Company (together with interest due thereon) 
on or after the date of taking over of management of the 
undertakings of the Company, 
(d) wages, salaries and other dues of employees of the Company 
and dues on account of any deductions made from wages 
and salaries and other dues of such employees relating to 
any period commencing on and from the date of taking over 
of management of the undertakings of the Company, or 
(e) any debt incurred by the Company during any period 
commencing on and from the date of taking over of 
management of the undertakings of the Company, not being 
a debt falling under clause (a), clause (b), clause (c) or 
clause (d), 
shall, on and from the appointed day, be the liability of the State 
Government or the Government company as aforesaid and shall be 
discharged by the State Government or the existing Government company 
or the new Government company as aforesaid as and when repayment of 
such loans becomes due or such wages, salaries and other dues or debt 
become due and payable. 
148 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Ordinance, 1996. 
VII of 1996.] 
(Section 6.) 
(3) For the removal of doubts, it is hereby declared that— 
(a) save as otherwise expressly provided in this Act, no liability 
of the Company in relation to its undertakings in respect of 
any period prior to the appointed day shall be enforceable 
against the Central Government or the State Government 
or, where the undertakings of the Company are directed to 
vest, under section 6, in an existing Government company, 
or under section 7, in a new Government company, against 
such Government company; 
(b) no award, decree or order of any court, tribunal or other 
authority in relation to the undertakings of the Company 
passed on or after the appointed day, in respect of any matter, 
claim or dispute, which arose before the appointed day shall 
be enforceable against the Central Government or the State 
Government or, where the undertakings of the Company are 
directed to vest, under section 6, in an existing Government 
company, or under section 7, in a new Government company, 
against such Government company; 
(c) no liability incurred by the Company before the appointed 
day for the contravention of any provision of any law for the 
time being in force shall be enforceable against the Central 
Government or the State Government or, where the 
undertakings of the Company are directed to vest, under 
section 6, in an existing Government company, or under 
section 7, in a new Government company, against such 
Government company. 
6. (1) Notwithstanding anything contained in sections 3 and 4, 
the State Government may, if it is satisfied that an existing Government 
company is willing to comply, or has complied, with such terms and 
conditions as that Government may think fit to impose, direct, by 
notification, that the undertakings of the Company, and the right, title 
and interest of the Company in relation to its undertakings which have 
vested in the State Government under section 3, shall, instead of 
continuing to vest in the State Government, vest in that existing 
Government company either on the date of publication of the notification 
or on such earlier or later date (not being a date earlier than the appointed 
day) as may be specified in the notification. 
(2), Where the right, title "and interest of the Company in relation to 
its undertakings vest under sub-section (1) in an existing Government 
company, that Government company shall, on and from the date of 
Power of 
State 
Government 
to direct 
vesting 
of the 
undertakings 
of the 
Company in 
an existing 
Government 
company. 
149 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
[West Ben. Act 
Power of 
State 
Government 
to direct 
vesting 
of the 
undertakings 
of the 
Company 
in a new 
Government 
company.. 
Payment of 
amount. 
(Sections 7, 8.) 
such vesting, be deemed to have become, and shall be deemed to be, the 
owner in relation to such undertakings and the rights and liabilities of 
the State Government in relation to such undertakings shall, on and 
from the date of such vesting, be deemed to have become, and shall be 
deemed to be, the rights and liabilities, respectively, of that existing 
Government company. 
7. (1) Notwithstanding anything contained in sections 3, 4 and 6, 
the State Government may, if it is satisfied that a new Government 
company is willing to comply, or has complied, with such terms and 
conditions as that Government may think fit to impose, direct, by 
notification, that the undertakings of the Company, and the right, title 
and interest of the Company in relation to its undertakings which have 
vested in the State Government under section 3, shall, instead of 
continuing to vest in the State Government, vest in that new Government 
company either on the date of publication of the notification or on such 
earlier or later date (not being a date earlier than the date of registration 
of the new Government company) as may be specified in the notification. 
(2) Where the right, title and interest of the Company in relation to 
its undertakings vest under sub-section (1) in a new Government company, 
that new Government company shall, on and from the date of such vesting, 
be deemed to have become the owner in relation to such undertakings 
and the rights and liabilities of the State Government in relation to such 
undertakings shall, on and from the date of such vesting, be deemed to 
have become the rights and liabilities, respectively, of that new 
Government company. 
8. .(1) For the transfer to, and vesting in, the State Government, 
under section 3, of the undertakings of the Company and the right, title 
and interest of the Company in relation to its undertakings, there shall 
be given by the State Government to the Company in cash, as a one-time 
settlement, a sum of rupees forty-one thousand within such time as the 
State Government may by notification specify. 
(2) For the avoidance of doubts, it is hereby declared that the liabilities 
of the Company in relation to the undertakings which have vested in the 
State Government under section 3, shall be met from the amount specified 
in sub-section (1). 
(3) For the deprivation of the Company of the management of its 
undertakings, there shall be given to the Company by the State 
Government an amount of rupees five hundred and twenty-three. 
150 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
XIII of 1996.] 
(Sections 9, 10.) 
(4) Every person having a claim against the Company shall prefer 
such claim before the Commissioner of Payments appointed under section 
9 within such period as the State Government may by notification specify. 
The procedure of disposing the claim shall be such as may be prescribed. 
(5) Notwithstanding anything contained elsewhere in this Act,— 
(a) any amount payable to any bank or financial institution 
towards repayment of the principal amount of any secured 
loans advanced by such bank or financial institution to the 
Company before the date of taking over of management of 
the undertakings of the Company, shall be paid directly by 
the State Government to such bank or financial institution 
in accordance with such agreement, in writing, as the State 
Government and the bank or the financial institution may 
enter into with each other; and 
(b) • the amount payable by the State Government directly to any 
bank or financial institution under clause (a) shall be deducted 
from the amount payable to the Company under this section. 
9. (1) The State Government shall, for the purpose of disbursing Appointment 
the amounts payable under section 8, by notification, appoint a •of Commi 
ssioner of Commissioner of Payments. 	 Payments. 
(2) The salary and allowances of the Commissioner appointed under 
this section shall be defrayed out of the Consolidated Fund of the State. 
10. (1) The general superintendence, direction, control and 
management of the affairs and business of the undertakings of the 
Company, the right, title and interest in relation to which have vested in 
the State Government under section 3, shall,— 
(a) where a direction has been given by the State Government 
under sub-section (1) of section 6, vest, on and from the date 
specified in such direction, in the existing Government 
company specified therein, or 
(b) where a direction has been given by the State Government 
under sub-section (1) of section 7, vest, on and from the date 
specified in such direction, in the new Government company 
specified therein, or 
(c) where no direction referred to in clause (a) or clause (b) has 
been given, vest in one or more Custodians appointed by the 
State Government under sub-section (2), 
and thereupon the existing, or new, Government company so specified 
or the Custodian or Custodians so appointed, as the case may be, shall be 
entitled to exercise, to the exclusion of all other persons, all such powers 
and do all such things as the Company is authorised to exercise and do 
in relation to its undertakings. 
Management, 
etc., of the 
undertakings 
of the 
Company. 
151 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
[West Ben. Act 
Duty of 
person in 
charge of 
management 
of the 
undertakings 
of the 
Company to 
deliver all 
assets, etc. 
(Section 11.) 
(2) The State Government may appoint one or more individuals or a 
Government company as the Custodian or Custodians of the undertakings 
of the Company in relation to which no direction has been given by it 
under sub-section (1) of section 6 or sub-section (1) of section 7. 
(3) The Custodian or Custodians so appointed shall receive from 
the funds of the undertakings of the Company such remuneration as the 
State Government may fix and hold office during the pleasure of the 
State Government. 
11. (1) On the vesting of the management of the undertakings of 
the Company in an existing, or new, Government company or on the 
appointment of a Custodian or Custodians, all persons in charge of the 
management of the undertakings of the Company immediately before 
such vesting or appointment shall be bound to deliver to such Government 
company, or Custodian or Custodians, as the case may be, all assets, 
books of account, registers and other documents in their custody relating 
to the undertakings of such Company. 
(2) The State Government may issue such directions as it may deem 
desirable in the circumstances of the case to the existing, or new, 
Government company or the Custodian or Custodans as to the power 
and duties of such Government company or Custodian or Custodians, 
and such Government company or Custodian or Custodians may also, if 
it is considered necessary so to do, apply to the State Government at any 
time for instructions as to the manner in which the management of the 
undertakings of the Company shall be conducted or in relation to any 
other matter arising in the course of such management. 
(3) Any person, who on the appointed day has in his possession or 
under his control any books, documents or other papers relating to the 
undertakings of the Company which have vested in the State Government 
or in any existing, or new, Government company and which belong to 
the Company, or would have so belonged if the undertakings of the 
Company had not vested in the State Government or the existing, or 
new, Government company, shall be liable to account for the said books, 
documents or other papers to the State Government or the existing, or 
new, Government company, as the case may be, and shall deliver them 
up to the State Government or the existing, or new, Government 
company, or to such person or body of persons as the State Government 
or such Government company may specify in this behalf. 
(4) The State Government or the existing, or new, Government 
company may take, or cause to be taken, all necessary steps for securing 
possession of all undertakings which have vested in the State Government 
or the existing, or new, Government company under this Act. 
152 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
XIII of 1996.] 
(Sections 12-15.) 
(5) The Company shall, within such period as the State Government 
may allow in this behalf, furnish to that Government a complete inventory 
of all its properties and assets, as on the appointed day, pertaining to 
the undertakings which have vested in the State Government under section 
3, and, for this purpose, the State Government or the existing, or new, 
Government company shall afford to the Company all reasonable 
facilities. 
12. The Custodian or Custodians of the undertakings of the Company 
shall maintain an account of the undertakings of the Company in such 
form and under such conditions as may be prescribed and. the provisions 
I of 1956 	 of the Companies Act, 1956 shall apply to the audit of the accounts so 
maintained as they apply to the audit of the accounts of a company. 
13. Every person who has been, immediately before the appointed Employment 
day, employed in any of the undertakings of the Company shall become,— of certain 
employees (a) on and from the appointed day, an employee of the State to continue. 
Government, and 
(b) where the undertakings of the Company are directed to vest, 
under sub-section (1) of section 6, in an existing Government 
company, or under sub-section (1) of section 7, in a new 
Government company, an employee of such Government 
company on and from the date of such vesting, 
and shall hold office or service under the State Government or the existing; 
or new, Government company, as the case may be, with the same rights 
and privileges as to pension, gratuity and other matters as would have 
been admissible to him if there had been no such vesting or transfer 
and shall continue to do so unless and until his employment under the 
State Government or the existing, or new, Government company, as the 
case may be, is duly terminated or until his remuneration and other 
conditions of service are duly altered by the State Government or the 
existing, or new, Government company, as the case may be. 
14. The provisions of this Act shall have effect notwithstanding 
anything inconsistent therewith contained.in any other law for the time 
being in force or in any instrument having effect by virtue of any law 
other than this Act, or in any decree or order of any court, tribunal or 
other authority. 
15. No suit, prosecution or other legal proceeding shall lie against 
the State Government or any officer of that Government-or the Custodian 
of the undertakings of the Company or the existing, or new, Government 
company or any officer or other person authorised by that Government 
or existing, or new, Government company for anything which is in good 
faith done or intended to be done under this Act. 
Account 
and audit. 
Act to have 
overriding 
effect. 
Protection 
of action 
taken in 
good faith. 
153 
The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Act, 1996. 
[West Ben. Act XIII of 1996.] 
(Sections 16-18.) 
Power to 	 16. (1) The State Government may, by notification, make rules for 
make rules. 	 carrying out the provisions of this Act. 
(2) In particular and without prejudice to the generality of the 
foregoing power, such rules may provide for all or any of the matters 
which under any provision of this Act, are required to be prescribed or to 
be provided for by rules. 
(3) Every rule made by the State Government under this Act shall 
be laid, as soon as may be, after it is made, before the State Legislature, 
while it is in session, for a total period of thirty days which may be 
comprised in one session or in two or more successive sessions, and if, 
before the expiry of the, session immediately following the session or the 
successive sessions aforesaid, the State Legislature agrees in making 
any modifications in the rule or the State Legislature agrees that the rule 
should not be made, the rule shall thereafter have effect only in such 
modified form or be of no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the 
validity of anything previously done under that rule. 
Power to 
remove 
difficulties. 
Repeal and 
saving. 
17. If any difficulty arises in giving effect to the provisions of this 
Act, the State Government .may, by order not inconsistent with the 
provisions of this Act, remove the difficulty: 
Provided that no such order shall be made after the expiry of a period 
of two years from the date of coming into force of this Act. 
18. (1) The Lily Barley Mills (Private) Limited (Acquisition and 
Transfer of Undertakings) Ordinance, 1996, is hereby repealed. 
(2) Notwithstanding such repeal, anything done or any action taken 
under the principal Act as amended by the said Ordinance shall be deemed 
to have been validly done or taken under the principal Act as amended 
by this Act. 
West Ben. 
Ord. VII 
of 1996. 
154 

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